Lithium X Energy Corp (CVE:LIX) (OTCMKTS:LIXXF) Gets A Closer Look

Lithium X Energy Corp (CVE:LIX) (OTCMKTS:LIXXF) has spent the better part of the past six months stuck in a narrow trading range. We first took notice of the company back in August after it ran up the charts at the end of July. We were expecting some follow thru on the excitement surrounding the lithium sector, but it never materialized. Instead, we've gotten consolidation. Now, we're taking another look to see if the breakout we've been waiting for is going to happen in 2017.First up, a little background on the company. Lithium X Energy Corp. is a lithium exploration and development company with a goal of becoming a low-cost supplier for the burgeoning lithium battery industry. Lithium X owns 50%, and has the option to acquire up to 80%, of the Sal de los Angeles lithium brine project in the prolific "Lithium Triangle" in mining friendly Salta province, Argentina, a well-known salar with a large resource and high concentrations of lithium.Lithium X's Arizaro project consists of 33,846 hectares located in one of the world's largest salars thought to contain elevated lithium brine values. Lithium X is also exploring a large land package in Nevada's Clayton Valley , contiguous to the only producing lithium operation in North America – Silver Peak, owned and operated by Albemarle, the world's largest lithium producer.At the end of January, Lithium X entered into a binding purchase and sale agreement to acquire 100% of the Arizaro lithium brine project in Argentina's Salta Province. The Project consists of 33,846 hectares in 11 mining claims covering parts of the western and eastern portions of the Salar de Arizaro, one of the district's largest known salt lakes. Lithium X is paying US$250,000 and issuing 3,500,000 common shares to the Vendor for a 100% interest in the Project on closing, which is subject to receiving valid title certificates. Chairman Paul Matysek said:

"Arizaro is an accretive acquisition for Lithium X, well priced under current market conditions, with considerable exploration potential. It is one of the largest salars in the world thought to contain elevated lithium brine values and has gone largely unexplored. Preliminary indications of brine geochemistry suggest the possibility of employing Arizaro Project brine products to increase and enhance processing of Sal de los Angeles brine, the Company's flagship asset, also located in Salta, Argentina."

Regarding the Sal de los Angeles Project, the concentrated brine is currently at 4% lithium by weight and the first batches of product at 5% lithium concentration are expected by March 2017 , which will then be shipped to potential end users and for testing of battery grade lithium carbonate at laboratory scale by the Company. Salta Exploraciones S.A. Joint Venture has initiated construction of the camp expansion with the exploration program set to begin this month.Resource expansion will consist of additional seismic surveys and drilling to basement depths to the north of the existing resource boundary. The northern portion of the basin contains the higher grade brines hosted in predominantly sand and gravel layers, with approximately 9 square kilometres of this area yet untested by drilling. Resource upgrading will consist of additional long and short term pump tests as well as collection of additional samples for relative brine release capacity testing. COO Eduardo Morales said:

"Half way through our first summer season, we are extremely pleased with the evaporation rates and crystallization path of our brine. We designed a ponding flow sheet that would enable the production of a 5% lithium brine that is both potentially a commercial product and feed for a battery grade lithium carbonate plant. The Sal de los Angeles brine is now at 4% lithium concentration, having followed the crystallization path at our on-site pilot pools within expectations, reaffirming my conviction as to the high processing quality of this brine. With current evaporation rates we expect to reach our target concentration before the end of March, 2017 demonstrating in this way a full cycle is achievable within a single summer season."

Currently trading with a market cap of $111 million, Lithum X Energy is well funded compared to other lithium players. At the end of September, the company had $12.7 million in cash, $30 million in total assets, and just $257,000 in total liabilities. While many shareholders are no doubt frustrated by the stock's consolidation, the good news is that we believe the downside is limited and that Lithium X Energy Corp represents a good risk/reward bet with minimal downside. It is certainly one of the best lithium plays on the market with a proven, talented management team.We will be updating our subscribers as soon as we know more. For the latest updates on LIX/LIXXF, sign up below!Disclosure: We have no position in LIX/LIXXF and have not been compensated for this article.